hw6 - to split the 100 dollars. Bargaining works as...

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ECON 401: Assignment 6 due date: November 14, 2011 1. Determine whether the following statements are true or false. Explain why. (a) Suppose a strictly dominant strategy exists for player i in some normal-form game, then in any Nash equlibrium, player i must play that (pure) strictly dominant stratgy. (b) Suppose a weakly dominant strategy exists for player i in some normal-form game, then in any Nash equlibrium, player i must play that (pure) weakly dominant stratgy. 2. Find all Nash Equilibria (pure and mixed) for the following normal-form game. D E F A -1,3 2,2 4,0 B 2,-1 0,1 0,2 3. Consider a bargaining situation in which two individuals are considering undertaking
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Unformatted text preview: to split the 100 dollars. Bargaining works as follows: The two individuals each make a (non-negative) demand (in dollars) simultaneously. If their demands sum to more than $100, then they fail to agree, and each gets nothing. If their demands sum to less than or equal to $100, they do the project, each gets his demand, and the rest goes to charity. (a) Does each player have strictly dominated strategies? If yes, what are they? If no, explain why? (b) Does each player have weakly dominated strategies? If yes, what are they? If no, explain why? (c) Find all pure-strategy Nash Equilibria for this game. 1...
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This note was uploaded on 02/09/2012 for the course ECON 401 taught by Professor Siyang during the Spring '11 term at Rice.

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